NPS Returns are delivered by NPS Pension Fund Managers. As a subscriber, you can select one of 8 Pension Fund Managers (PFMs) in the NPS. You can also select the split between the four NPS asset classes – Equity, Corporate Bonds, Government Bonds and Alternate Assets. Your returns depend on the asset allocation and the pension fund managers you have selected. The NPS works best as a long term investment. The earlier you start contributing to the NPS, the longer your money will have to grow.
Government employees who are enrolled in the NPS (Central Government) or NPS (State Government) cannot select the Pension Fund Managers unfortunately. This is set by the government for such subscribers.
Compounding in the NPS
The NPS money is invested in the four NPS asset classes – Equity, Corporate Bonds, Government Bonds and Alternate Assets. There is no explicit rate of compounding in the NPS. However all these assets have growth rates. If you consider the growth in the value of these assets over time you can work out the compounding rate in them. This is given by the Compounded Annual Growth Rate (CAGR) which you can see in the tables below.

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Returns of NPS Tier 1 (Equity) as of July 19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns since Inception |
BIRLA PF | 1.19% | NA | NA | 8.39% |
HDFC PF | 3.67% | 11.10% | 9.48% | 13.92% |
ICICI PF | 3.31% | 9.54% | 8.72% | 11.12% |
KOTAK PF | 5.53% | 9.66% | 8.84% | 10.21% |
LIC PF | 3.77% | 8.29% | 7.79% | 11.12% |
RELIANCE PF | 4.90% | 8.82% | 8.08% | 10.16% |
SBI PF | 3.93% | 9.83% | 8.97% | 9.46% |
UTI PF | 2.51% | 9.45% | 9.30% | 11.02% |
Average | 3.6% | 9.5% | 8.74% | 10.67% |
Returns of NPS Tier 1 (Corporate Bonds) as of July19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns Since Inception |
BIRLA PF | 14.21% | NA | NA | 10.45% |
HDFC PF | 13.85% | 9.16% | 10.43% | 10.60% |
ICICI PF | 14.27% | 9.44% | 10.80% | 10.74% |
KOTAK PF | 12.97% | 8.97% | 10.34% | 10.54% |
LIC PF | 14.01% | 8.76% | 10.23% | 10.48% |
RELIANCE PF | 12.91% | 8.95% | 10.23% | 9.47% |
SBI PF | 13.58% | 9.06% | 10.30% | 10.67% |
UTI PF | 12.98% | 8.70% | 10.05% | 9.54% |
Average | 13.59% | 9.00% | 10.34% | 10.31% |
Returns of NPS Tier 1 (Government Bonds) as of July 19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns Since Inception |
BIRLA PF | 20.14% | NA | NA | 10.60% |
HDFC PF | 20.19% | 10.08% | 11.40% | 10.94% |
ICICI PF | 20.11% | 10.20% | 11.53% | 9.48% |
KOTAK PF | 20.41% | 10.12% | 11.48% | 9.38% |
LIC PF | 23.11% | 12.07% | 12.54% | 12.43% |
RELIANCE PF | 19.55% | 10.03% | 11.44% | 9.11% |
SBI PF | 19.80% | 10.16% | 11.59% | 10.24% |
UTI PF | 18.98% | 9.38% | 10.94% | 9.06% |
Average | 20.28% | 10.29% | 11.56% | 10.15% |
Returns of NPS Tier 1 (Alternative Assets) as July 19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns Since Inception |
BIRLA PF | 7.53% | NA | NA | 7.18% |
HDFC PF | 11.84% | NA | NA | 8.70% |
ICICI PF | 11.59% | NA | NA | 8.00% |
KOTAK PF | 12.12% | NA | NA | 7.46% |
LIC PF | 10.46% | NA | NA | 7.99% |
RELIANCE PF | 7.60% | NA | NA | 6.88% |
SBI PF | 10.44% | NA | NA | 8.13% |
UTI PF | 7.56% | NA | NA | 7.06% |
Average | 9.89% | NA | NA | 7.67% |
Returns of NPS Tier 2 (Equity) as of July 19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns since Inception |
BIRLA PF | 0.79% | NA | NA | 8.03% |
HDFC PF | 3.57% | 11.17% | 9.54% | 11.18% |
ICICI PF | 3.40% | 9.62% | 8.76% | 9.12% |
KOTAK PF | 5.87% | 9.73% | 8.86% | 9.49% |
LIC PF | 4.61% | 8.21% | 7.18% | 7.91% |
RELIANCE PF | 4.23% | 8.71% | 8.02% | 8.98% |
SBI PF | 3.91% | 9.82% | 8.99% | 9.13% |
UTI PF | 3.18% | 9.90% | 9.57% | 9.40% |
Average | 3.69% | 9.59% | 8.70% | 9.15% |
Returns of NPS Tier 2 (Corporate Bonds) as of July 19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns since Inception |
BIRLA PF | 13.64% | NA | NA | 8.87% |
HDFC PF | 13.27% | 9.12% | 9.48% | 9.45% |
ICICI PF | 13.66% | 9.18% | 10.61% | 10.55% |
KOTAK PF | 13.27% | 9.04% | 10.13% | 9.50% |
LIC PF | 13.33% | 8.42% | 9.54% | 9.27% |
RELIANCE PF | 10.89% | 8.35% | 9.77% | 9.06% |
SBI PF | 13.05% | 8.86% | 10.18% | 10.28% |
UTI PF | 12.97% | 8.68% | 9.99% | 9.62% |
Average | 13.01% | 8.80% | 9.95% | 9.57% |
Returns of NPS Tier 2 (Government Bonds) as of July 19, 2019
Pension Fund | 1 Year Return | 3 Year Return | 5 Year Return | Returns since Inception |
BIRLA PF | 19.98% | – | – | – |
HDFC PF | 19.87% | 9.95% | 11.25% | 11.29% |
ICICI PF | 19.83% | 10.09% | 11.47% | 9.61% |
KOTAK PF | 18.81% | 9.66% | 11.20% | 9.12% |
LIC PF | 24.42% | 12.39% | 12.60% | 12.82% |
RELIANCE PF | 17.11% | 9.25% | 11.02% | 9.12% |
SBI PF | 19.16% | 9.91% | 11.41% | 10.30% |
UTI PF | 19.50% | 9.67% | 11.16% | 9.96% |
Average | 19.83% | 10.13% | 11.44% | 10.31% |

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NPS Interest Rates
NPS does not have interest rates because its returns are market linked, like mutual funds. You can view the returns of the NPS in the tables above. However unlike mutual funds, NPS is regulated more tightly by the PFRDA. Pension Funds cannot invest in small cap companies or foreign companies. They are also highly restricted in the types of debt they can invest in.
Read More: NPS Calculator : Calculate Maturity Value & Monthly Pension
Tax on NPS Returns
There is no tax on NPS returns as long as your money is not withdrawn. In addition, you can make up to 3 partial withdrawals from your NPS Tier 1 account on specific grounds like home purchase, medical treatment and children’s education. There is no tax on such withdrawals. The NPS account matures at the age of 60 and you can withdraw up to 60% of the accumulated corpus tax free. This corpus includes both your contributions and returns. You can also make a premature exit after completing 3 years in the NPS even before the age of 60. In such a scenario, you can withdraw up to 20% of your corpus which will be taxed at slab rate. The balance 80% has to be used to buy an annuity (regular pension). The annuity will be taxable at your slab rate.